The U.S. Is Still Growing Faster Than Other Rich Countries
(Bloomberg View) -- While economic growth prospects for the rest of the world are being upgraded, the International Monetary Fund thinks the U.S. is going to keep plodding along at just over 2 percent annual growth. Look a little closer at the IMF World Economic Outlook report released this week, though, and it's apparent that this faster global growth is almost all coming from emerging markets. The IMF still forecasts that gross domestic product will grow faster in the U.S. this year and next than in the euro zone, the U.K. or Japan.
This has been the story for several decades now, with the U.S. giving ground to rising nations such as China and India -- but usually not giving up as much ground as other advanced economies.
This is partly about population growth. The ranks of working-age people -- a key driver of economic growth -- continued to increase in the U.S. even as they started to shrink in Japan and then Europe. This growth in the population aged 15 through 64 is actually estimated to have stopped in January. But never fear: Per-capita GDP growth in the U.S. has generally outpaced that of other big developed economies as well.
In July I wrote a column, based on a different IMF report, that argued that "The U.S. Is the Sick Man of the Developed World." By many measures of living standards, it is. Poverty rates and mortality rates are higher and school test scores lower in the U.S. than in other rich countries, and the U.S. has slid in the rankings since the 1990s in most of these areas. According to the simple metric of GDP per capita, though, the U.S. still looks pretty healthy -- by developed-world standards.
So does this mean that the U.S., which is already outgrowing its peers, should focus more on fighting economic inequality and raising living standards? Or does it mean that other developed countries should be paying more attention to promoting growth? Probably a bit of both.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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